Concept explainers
To explain: The possible locations that must be selected by the firm for its plants.
Explanation of Solution
The possible locations that must be selected by the firm for its plants:
The firm must be looking at a concentrated manufacturing strategy because of the following reasons:
- The tariffs for the industry are very low.
- The cost required to build a plant to produce the microprocessors are very high.
- The value to weight ratio of the product is very high.
The firm should look at the following factors before determining the appropriate location. They are:
- Country factors.
- Technological factors and
- Product factors.
These factors will probably limit the new locations to any one of the developed nations. They have to select a country with a pool of skilled workers. The firm will be forced to select a technically strong country as it would like to reduce the costs involved in constructing a plant. The product will be developed keeping in mind the value to weight ratio and the universal appeal for the product.
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Chapter 17 Solutions
INTERNATIONAL BUSINESS W/CONNECT
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